General Discussion

Tax reform: How Ron Wyden will shape taxes

Sen. Ron Wyden (D) of Oregon is poised to become the new chair of the Senate Finance Committee. Mr. Wyden is the sponsor of a major tax reform plan that would reduce both individual and corporate tax rates without adding to the deficit or changing the current distribution of taxes among income groups very much, Gleckman writes.

By Howard Gleckman,

Senator Ron Wyden (D-OR), who is poised to become the new chair of the Senate Finance Committee, is the sponsor of a major tax reform plan that would reduce both individual and corporate tax rates without adding to the deficit or changing the current distribution of taxes among income groups very much.

The 64-year-old Wyden, who has a history of proposing creative, ambitious, and sometimes controversial ideas, initially sponsored a tax code overhaul in 2010 with former GOP senator Judd Gregg of New Hampshire. After Gregg retired, Wyden found another GOP cosponsor in Dan Coates of Indiana. Wyden-Coates follows the broad outline of the original Wyden-Gregg plan.

For individuals, it would set three rates—15-25-35. The top bracket would kick in at $140,000 for couples filing jointly. It would repeal the Alternative Minimum Tax, nearly triple the standard deduction, and create a 35 percent exclusion for long-term capital gains and dividends (equal to a rate of 22.75 percent for top-bracket taxpayers). It would eliminate the tax advantages of many employee benefits–but not employer-sponsored health insurance–and simplify tax-preferred savings.

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Wyden-Coates would cut the corporate rate to 24 percent from 35 percent. It would end the ability of U.S. multinationals to defer tax on income earned abroad but would allow them a one-time opportunity to bring old earnings back to the U.S at a very low rate.

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http://www.csmonitor.com/Business/Tax-VOX/2013/1227/Tax-reform-How-Ron-Wyden-will-shape-taxes